According to the Obama Administrations October 2011 housing scorecard, there have been approximately 5.3 million loan modification arrangements started between April 2009 and the end of September 2011, and of the 5.3 million loan modification starts there have been 850,000 permanent modifications to date. Do the math…that is equal to a whopping 16% of all loan modifications started that actually get permanently modified. In the beginning, when the HAMP (Housing Afforable Modifcation Program) was initially announed it was supposed to have helped 3-4 million home owners by now…and it’s clear that’s not going to happen.

What does this mean if you are in the middle of a loan modification?

First, I am pretty sure you are frustrated to no end. Second, you have a 1 in about 6 chance of getting a permanent  loan modification completed (you’ll get better odds at a blackjack table in Las Vegas!). Third, you should have a plan “B” and that your plan “B” should be to do whatever it takes to avoid a foreclosure, because if you don’t get the loan modification you’ll want to limit the damage to your credit so that you can purchase a home in the future which could be 2-3 years if you avoid a foreclosure and as long as 7-10 if you don’t, and Fourth, if you purchased or refinanced your Southern California property between the years 2002 – 2007 then you may owe much more on the  property than what the property is worth thus getting turned down for a loan modification may be a blessing in disguise.